Truck lines lead Japanese inroads

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Never mind plastics, Mrs. Robinson. Toyota Motor Sales USA has seen its future, and it's trucks.

"The truck market is really key to our future growth, especially large pickups," says Jim Press, exec VP-chief operating officer. "We have a lower share of the truck market, especially large trucks."

So, Mr. Press says, Toyota is reinventing its full-size Toyota Tundra pickup, which will be built at a plant under construction in Texas. "We are upgrading the content of our vehicles, improving the style and reducing our costs substantially so we can offer a better value."

The truck category consists of pickups, sport-utility vehicles and minivans. Toyota still has a way to go before it shakes up Detroit's lock on the full-size pickup truck segment.

But don't count Toyota out when it comes to trucks. Just this month at the Chicago Auto Show, it unveiled the new 2007 Toyota FJ Cruiser SUV, aimed at young men. The SUV will hit the market in about a year, with an annual sales goal of about 40,000.

Toyota and Lexus both successfully grew their brands by expanding their truck lines in recent years.

Among the arrivals during the period were the Toyota Highlander SUV, which came in 2001, and the Tacoma Double Cab, which bowed in fall 2000 as a 2001 model. Lexus added the GX, an eight-seat SUV, in late 2002.

luxury hybrid

This year, Lexus adds the first luxury hybrid SUV, the RX 400h, a version of its popular RX330. Toyota Division adds the hybrid gas-electric Highlander SUV.

Toyota Motor Sales USA was the first Japanese automaker to understand the importance of the truck segment so it invested in product development, says George Peterson, president of consultancy AutoPacific. He says the next-generation Tundra will be "more macho," which means it should better compete with Detroit.

Susan Jacobs, president of auto consultancy Jacobs & Associates, says Toyota has an unrealized potential in trucks. The brand's truck strength is in its compact pickups; Toyota had a 22.8% share last year, meaning one in five buyers got a Tacoma.

Toyota "has the credibility to build its volume" in full-size pickups from its current share of 4.4%, Ms. Jacobs says.

Camry owners are moving up to full-size pickups, Mr. Press says, and the company has a lot of Tacoma compact-pickup owners who are also moving up to full-size. "With the next Tundra, we need to come out with a product that will retain them," he says.

Toyota Division's ad strategy for full-size pickups is regionalized due to variations in awareness from area to area, said Jim Lentz, group VP-marketing of the unit. For example, the Kansas City area has some of the lowest familiarity with Toyota trucks, compared with Los Angeles, where it's high. So the marketer wouldn't spend more in local TV in Kansas City but would invest in test-drive events to get people to experience the product.

Toyota Division's truck advertising sputtered last year when it ran one TV spot backing the entire SUV line. Mr. Lentz says the tactic "wasn't very successful."

The media plan was the main problem since the SUV line ranges from the RAV4, whose customer base is 70% women, to the 4Runner, which skews 70% male.

The automaker doesn't need more truck models, Mr. Press says, but instead, "We really need to do the best job we can with the trucks we have."

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